Court chooses more lenient limitation period for unpaid overtime

Vlahakos v. Ridley Inc. (2002), 21 C.C.E.L. (3d) 192 (Man. Q.B.)

Gene Vlahakos started working for Ridley in February 1996. Ridley was a federal employer governed by the provisions of the Canada Labour Code.

Vlahakos entered into a contract of employment with Ridley which provided a salary of $30,000 a year for a standard 40-hour workweek. Contrary to the provisions of the Canada Labour Code, the contract provided overtime pay would be negotiable, depending on the circumstances, but it would not be paid unless Vlahakos worked a minimum of two-and-a-half hours of overtime in a given week.

While still working for Ridley, Vlahakos made a complaint to the labour board regarding non-payment of overtime. The labour board awarded Vlahakos compensation for unpaid overtime from January 1998 to August 1998.

Vlahakos was then told by Ridley she would also receive compensation for overtime worked and unpaid from February 1996 forward, but these amounts were never paid. Vlahakos only received compensation from January 1998 to August 1998, as ordered by the board.

After she stopped working for Ridley, Vlahakos started a civil action in April 2002 in small claims court seeking recovery of overtime pay for the period from February 1996 to January 1998.

The employer took the position the claim was statute barred because under Manitoba’s Limitation of Actions Act a civil suit based on the enforcement of a contract needs to be started within six years. The court agreed the claim for unpaid overtime from February 1996 to March 1996 was out of time and those amounts could not be claimed.

Ridley also argued that since the Canada Labour Code deals with the issue of non-payment of overtime the civil courts do not have jurisdiction. Ridley argued the code imposes a three-year limitation period on making these types of complaints and, therefore, Vlahako’s entire claim from February 1996 to January 1998 was out of time.

The deputy registrar of the small claims court agreed with the employer and dismissed Vlahakos’ claim. On appeal the judge noted the applicable parts of the Canada Labour Code expressly provide the provisions of the code were not to be construed as limiting rights or benefits an employee otherwise has that are more favourable to the employee.

The court concluded the right the employee has to enforce the contract in the civil courts (with a six-year limitation period) was a more favourable right than the right the employee had to enforce overtime obligations under the code (with only a three-year limitation period) and therefore concluded judicial discretion should be exercised to allow Vlahako’s civil claim for unpaid overtime to proceed.

The court concluded she was entitled to $2,202.85 for unpaid overtime plus legal costs and disbursements.

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